The food and beverage industry is undergoing much change, and companies deal with significant challenges that need immediate remedies. And when we talk about challenges, there are several of them, and they come in different sizes and impacts. These challenges are discussed through the following three arguments to facilitate a simple yet effective flow of thoughts.
Supply Chain Instabilities:
Today, we do not need a big event or disaster like a pandemic affecting the entire world anymore to face supply chain problems. The world is getting smaller every single day. We are connected more than ever. And we are getting equally the heat of what is happening in other parts of the supply chain and the world. We live in a world where things are Volatile, Uncertain, Complex, and Ambiguous. Doing business is like riding on a roller-coaster, creating the feeling of a void in your stomach.
We see food manufacturers in need of developing local resources more and more to avoid big supply chain problems happening in the future. While doing business in an FMCG environment, being agile and flexible is crucial. But being fast does not necessarily mean being safe at the same time. Having foresight is critical—the foresight comes from insight (internal) and horizon scanning (external). Having your supply chain mapped with possible alternatives is essential for success.
Can auditing be an aid in developing solutions? Companies can and should deploy auditing to understand risks and opportunities to redesign their business strategies for their existing and future supply chain.
Scarce of Resources
Imagine that you need to move your supply base from one location to another for many reasons. Do you have the capable resources? Do the new suppliers meet your food safety and quality requirements from day one?
Imagine you have the safe food produced, but do you have the business partners with the right capabilities to ensure consumers are getting it still safe and fresh? Business partners like logistics, co-manufacturers, and distributors. You name it. You must also understand their capabilities in meeting your food safety and quality requirements.
Food safety can only be ensured when you have full governance over each step of your supply chain. Unfortunately, the food and beverage companies are struggling with the limited number of capabilities in people, suppliers, and business partners, which limit their agility and flexibility.
The food and beverage industry generates a massive amount of data daily. Technology is evolving. AI, the Internet of things, and robots are all in our hands. The methods we produce and sell are completely different from 10 years back. Is the food industry capable of analyzing the data to understand the risks better?
Imagine the food safety data of a particular company can be analyzed with a simple movement of your finger by hitting the enter key. Wouldn’t it be marvelous to see the risks just by looking at the data generated? I must admit that some food companies, particularly big multinationals, had some critical progress; however, I believe there is a long way to go to complete the journey of digitalization. Okay, there are some obstacles to having complete network and data access. Yes, it takes time, effort, and money to transform. However, we need to get there.
Auditing here can help organizations understand the available resources, including the digital footprint and capabilities. Companies would then be able to plan to address the gaps.
As mentioned earlier, the world is getting smaller, and we are connected more than ever. This has shaped the behaviors and expectations of consumers too. They are more demanding. They are more conscious. They read labels, know the ingredients used in the products, and have access to information, including recalls. They look for healthier choices but would still like to enjoy the taste. They are more mobile. They travel and taste different products in different locations and would like to have those in their market too.
So, consumers are asking for novelty more than ever. The shelves of supermarkets are full of new products. From plant-based to paleo, from no sugar added to gluten-free, you can see various kinds of the same products. There is no more one type of milk or meat. For example, consumers want a vegan hamburger to taste like a meat hamburger. They also ask for a reasonable price. Can you imagine the complexity of all these? Every new type of product will require new ingredients, technologies, processes, capabilities, and supply base, so the list is long.
Most global companies have their “new product innovation process,” which is probably the most critical business process with the most extensive scope and considerable scale. Each step in the innovation process triggers a sub-process for at least a few different departments. It involves all functions, from CEO to the shop floor. When food safety design requirements are not appropriately integrated into this chain of processes, eventually, the organization will fail to produce safe products. Auditing here can play a role in assessing the health of the entire process in addressing food safety requirements while meeting the consumer’s expectations and objectives of the business.
By Tülay Kahraman
25 June, 2022